Well, it’s a bit dreary out but for September 23rd, I’m not complaining one bit.
Rates have been bouncing around since last Wednesday to end up just a tad bit lower than this time last week.
We could see some volatility later today as the Federal Reserve will release their latest policy statement today. In tune with the past several statements, most economists are expecting the Fed to kept he Federal Funds rate unchanged. This leaves us with the current key interest rate of 3.25%. Investors will be looking for how the statement is worded to garner courage for their trading later in the day. This will ultimately determine which direction we see interest rates go this afternoon.
One misconception I have talked about in the past is something I always feel a need to revisit now and again as a reminder. Many outside of the industry tend to believe that there is a direct correlation between the key interest rate and mortgage rates. If the Federal Reserve lowered the key interest rate by .25%, the fixed mortgage rates would not lower by .25%. The fixed rates are more directly tied to mortgage backed securities and the price that these securities can fetch when being sold on the open market.
What would change would be a variable rate mortgage (such as a home equity line of credit from your local bank) because they tend to be tied to the key interest rate. The reason for this is with this type of loan, the bank that offers it to you is borrowing their money from the Federal Reserve if needed at 3.25%. Because they are not selling this line of credit to another bank, they are determining their interest rate based on what they have to pay to lend that money. So if your line of credit is currently 3.5% and the Federal Reserve lowered their rate by .25%, then you would most likely see your Line of Credit lower by that same .25% to 3.25%. This would work the same way if the Federal Reserve chose to raise the interest rate as well.
If you want a longer winded explanation, feel free to let me know!
Have a good week.
-Matt
30 year fixed: 5.00%
15 year fixed: 4.625%
Hello again!
After a quick jaunt out to Boston with my wife and a few friends, we are refreshed and ready to tackle the upcoming rush for first time homebuyers to buy a home before the $8,000 tax credit expires. It is currently set to expire on November 30th which means that many homebuyers will need to make sure they get have an offer accepted by the end of this month to ensure they will be able to close on the new home in time.
Because of the expiration date, we are expecting title companies to get booked up with closings on the final day as well as slow downs in underwriting to accommodate all of the buyers looking to take advantage of the tax credit. Be sure to remind anyone you know buying a home that moving quickly will be important to ensure they do not lose out.
Rates are still in a great position, they have risen slightly over the past two weeks but are still very low, making for a great time to buy.
Have a good week.
-Matt
30 year fixed: 5.125%
15 year fixed: 4.625%
Good morning,
Well, well, well. There has been a little dip in interest rates this week, the first time we have seen the 30 year fixed rate drop below 5% in a few months.
This is mainly due to the stock market needing to self correct itself over the past month. Many analysts have forecasted for some time that there would be a down week coming along in the stock market and when that happens, most investors end up moving the money over to Mortgage Backed Securities…when this happens, we see the fixed mortgage rate drop a bit.
As we saw last time with this, these rates don’t tend to last long and when they head back over 5%, it ends up being very tough for them to come back below that threshold.
Have a good week.
-Matt
30 year fixed: 4.875%
15 year fixed: 4.375%
Good morning,
As expected last week, rates rose to 5.375% through Friday of last week. Today’s market reactions have brought us back down to where we were last week. There was a rally in the market based on the positive results of the 2-year Treasury Auction being released yesterday.
This is still a time to be weary of where rates are heading, we are still in an artificial rate environment with the Federal Reserve purchasing mortgage backed securities themselves to keep demand consistent. When they use up the 1.3 Trillion they have dedicated to this program, rates will almost assuredly rise. So, let’s enjoy low rates while we can.
Have a great week!
-Matt
30 year fixed: 5.125%
15 year fixed: 4.625%
Good morning,
We have seen a nice little rally over the past couple days resulting in interest rates dropping by .25%. Not too shabby.
As with last week, tomorrow brings another Treasury auction announcement from the Federal Reserve which more than likely means we will see a slight deterioration in interest rates by the end of the day. Yesterday afternoon and this morning would be a great time for clients whom have already locked in their interest rates to call their lender and renegotiate for the best rate possible. A typical renegotiation will be about .125% higher than the going market rate. My afternoon was booked with renegotiating the home purchase loans that are closing at the end of this month.
Have a great week!
-Matt
30 year fixed: 5.125%
15 year fixed: 4.625%
Mortgage Planner of 8 years, specifying in ensuring that homebuyers both understand and enjoy the mortgage process, not worrying about last minute changes and closings not happening.
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